African Distillers pins hope on sustained stability efforts

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By Alois Vinga

LISTED wine and spirits manufacturer, African Distillers Limited (AfDIS) has pinned hopes on the monetary authorities’ capacity to sustain the current exchange rate stability.

This follows a series of interventions by monetary authorities which have seen both the annual and yearly inflation levels going down on the back of relatively stable exchange rates.

The stable ZWL has attracted acceptance from traders and the markets prompting AfDIS to urge authorities to sustain the efforts.

“The Company welcomes the efforts of the authorities to stabilise the economy and remains hopeful that the current stability in exchange rates and inflation can be sustained,” said the spirits maker.

During the half-year period that ended September 30, 2023, the company recorded a volume growth of 11% above the prior year benefitting from good product availability across all key brands, intensified product distribution and brand innovation.

The spirits category grew by 8% leveraging on the premiumisation of the Whitestone brand and firm demand for the affordable range.

Wine volume grew by 7% driven by increased market penetration in the second quarter while the Ready to Drink (“RTD”) segment registered a growth of 14% despite competition from lower-priced smuggled imports.

In inflation-adjusted terms, revenue increased by 156% to ZW$ 134 billion whilst operating income increased by 311% to ZW$ 28.3 billion.

In US$ terms, turnover for the half year was at US$ 25,7 million. Revenue growth in both inflation adjusted and historical terms was driven by the higher volume, favorable sales mix, and replacement cost-based pricing while operating profit increased due to volume growth and strict cost containment.

“Management continues to focus on supplying its full range of products to the market, identifying opportunities to grow, defend market share and improve profitability through product innovation, production efficiencies and cost control,” said the company.

The board has recommended an interim dividend of US$ 0.0030 per share, amounting to US$ 355,882.